Turn Every Dental Salary Into a Profit Machine (Without Micromanaging)

What if your salaries aren't an expense, but an investment? What if we start thinking about what we're paying our team members as something that we should be receiving in a return on versus just a line item on our P. Ls? And what if your return on the investment that you're making is just completely unclear? Too many dentists these days are writing checks every two weeks without knowing what they're actually getting in return. And if your underlying feeling when you hit that submit payroll button is resentment, it's time to take a look at how you're managing your team. And this isn't about being cheap, right? It's about being strategic. Foreign role in your practice should produce results and every team member should know what success looks like. If that's not happening, you're not running a business. You're running your payroll. And today we're going to fix that. Welcome to the Next Level Practice podcast where we don't just talk about the business of dentistry, we fix it. I'm your host, CEO of Next Level Practice, Kelly Dahmer. And today we're diving into the one of the biggest shifts a dental leader can make, moving from payroll to performance. And here's what I mean. I'd like to introduce you to Dr. B. She had a full team. She did not have a problem with trying to find team members or having her team be overworked. She had an entirely full team. Her salaries were high, morale was okay, but production wasn't matching the payroll. And really no one knew why. When we dug deeper, we found that 51% of her total revenue was going towards her team salaries. That's a lot. Now, in our pre Covid, we wanted to see that number be somewhere between 20 and 25%. Post Covid, we're looking at 30 to 35%. Good news is, is we're starting to see a shift a little bit with that coming down. A lot of salaries have been inflated, but 51% is very high. So our strategy here isn't just to start laying off team. Right. That would have the opposite effect on our culture. Instead, we really want to assess our strategy and figure out how we can increase our top line so that those salaries fall into more appropriate range. And really, when we looked at it, we saw this. There were no clear roles, no defined expectations, no way to measure success. There was also no one accountable to measuring the success. So everyone felt busy. Yeah, sure, their practice was very busy, but no one knew if they were actually winning. And you heard me say this before, right? Busy does not equal, productive. The other crazy thing here is when we actually took a survey of the team, we did a culture survey, they did express that they wanted more responsibility. They would like to actually have the ability to make more money, which I'm sure is hard to hear if you're already paying 51%. But they were also unclear of Dr. B's future direction for the practice. So the lack of clarity, the lack of goals, lack of communication around these things did lead to some uncertainty among the team. We helped Dr. B turn every role in her office into its own mini business, each with trackable outcomes that lined up to our annual goals that we put in place, broke that down monthly, then weekly, then daily, then by position. That daily position outcome, or what's called a KPI Key Performance Indicator, is its own mini business. Within 60 days, the team was completely on fire. Accountability went up, friction went down, and for the first time in years, Dr. B actually saw her payroll producing. It wasn't just draining her cash flow. So let's unpack how she did it and how you can too. Here's what we're diving into today. Why salaries aren't the problem. Unclear expectations are. And you've heard me say this before, one of the things to look at if you're feeling stressed and overwhelmed and you're repeating yourself every day like it's Groundhog's Day, the question to ask yourself is, are the people failing or is the structure failing the people? Nine times out of 10, we need to take responsibility. Responsibility as leaders that we don't have the correct structure in place in order for people to be successful. Second thing we're going to be talking about is how to turn every role in your practice into a results producing business. Many businesses, right. And the third thing we're covering today is the simple structure for tracking performance without micromanaging. There's a difference between being controlling versus being in control and having structures in place to manage performance and track performance is one of the ways that you can reduce that micromanaging that's so easy and comforting for us to slip into, even though we don't want to be doing it right. And if you've ever wondered, what exactly am I paying them for, this episode is your answer. Let's start with the truth that most practice owners avoid. You should know your ROI or return on investment for every single salary in your practice. We're not talking about squeezing blood from a stone here. We're talking about honoring your team by giving them clarity, goals, and a way to win and exceed Those goals. Let's go deeper into Dr. B's story. She did have amazing people, but the roles were completely fuzzy. Her front desk was doing hygiene recall, billing and patient coordination. So it was one of those everybody and anybody, somebody, nobody. There was real clarity on who exactly was to be doing what of those things and how do we measure those things. Her assistant was running sterilization, ordering supplies. Everyone was stretched, but no one was focused. Here's how we helped her create performance based clarity. First things first. Reframe every role as a business unit. Each position, your administrative team, your clinical team was treated as its own mini business. So we asked them, what are they responsible for? What outcomes do they drive and what would happen if they weren't here. Now I want to be clear here. Sometimes our team has an expectation of what they should, should be doing or what they are responsible for. And it's not necessarily the thing that they should be doing that's going to get the best result. So part of this is helping them actually realize, okay, here's what I should actually be doing. Here's what I could be delegating, here's what I just could be dumping off my plate and just not doing anymore. It's not making anything productive or produce. The other thing that you want to do when you're reframing every role is to recontextualize what it means. Right? So clarity on the role, an outcome by the role. But also it's not front desk. We're not pieces of furniture. We're a director of first impressions or a DofI. And we're not an assistant. You know, I'm just an assistant. We're a ninja. That's an acronym for no, I'm not just an assistant. So really, recontextualizing the positions as far as the framework inside of these clarity on roles and clarity on outcomes by position is another important piece of this. That's how you create your own mini business by role. Once you have that clarity, step two is to have those clarities written down. So instead of just guessing and saying, oh yeah, that's what I do, or I'm clear on that, it's actually written down. It's roles and responsibilities that are by position, by team member, and then you have the team sign off on that, that's going be really important and impactful for your team leader to actually manage the team. From when you have agreement and what's supposed to be doing and that agreement is not being fulfilled, your team leader then is just having conversation with the team and bringing them back to that agreement versus it being some lofty, unclear thing that hasn't been written down, or your team could even be like, oh, I didn't agree to that. There's no refuting it. It's written down, it's signed off on. It's very crystal clear. And that's going to lead to a lot more success for your team leader. Now that we have recontextualized our positions, we have clarity on what we should be doing. And we have a KPI or Q key performance indicator to measure that success. Now, we want to have really clear tracking systems in place so that different people who are responsible for tracking those things know whether they're on track to hit goals or not. You know, your administrative team, is the doctor and hygiene calendar being scheduled to an appropriate amount? Are we reactivating patients that are considered lost in the calendar? Are we filling the schedule for short cancellations or no shows? Our hygienists, you know, are they actually scheduled appropriately and able to hit their daily production goals and maybe even go over and above recommending some additional treatment like perio Protector, some whitening? Our treatment coordinators, are they presenting enough cases using their case acceptance rate or an appropriate one? Right. That might be something we need to look at as well, to close the cases and then have them be scheduled and filled. Our ninjas, how well are they supporting the efficiency for having the doctor Production goals met? Once all these numbers are visible, something magical happened. It's called ownership. Now, that's a key thing here, right? Because there's a difference between knowing our numbers and owning our numbers in this system. And process, Dr. B doesn't have to nag anymore. The numbers are doing the talking and the team starts leading themselves. Let's talk about your three actionable takeaways so that you can start implementing this right now in your practice. First things first, understand where you're starting from. The exercise I want you to do is calculate the return on investment per role inside of your practice. Ask yourself, what outcomes does this role directly impact? Is it a clinical team member or an administrative team member who is directly impactful for being high producing? Is it someone who's ordering supplies and is responsible for, you know, spending a lot of money in the practice? Those are two things that we want to track consistently. When you can track this and you can teach your team how to track this, and let me preface it by saying this, it's not just about the money, right? It's not just about how much we're making or how much we're spending, or vice versa, that's the scoreboard for the solvency of the business. And so when we can teach a team member to quantify their value using those metrics and a return on investment calculation, that would be my recommendation on how you can flip the script when it comes to performance pay. I feel like a lot of doctors that I talk to are always like, oh, well, they want about more money. Or that comes up very often in the culture surveys that we do. And it's like, okay, yeah, sure, I'd love everyone to make more money, but if you're at 51% in team salaries, how can you afford to just give out base increases? Right? So teaching them how to look at their return on investment for what the practice is investing in that team member and having them use that when they come to present what they would like to see in a pay increase is going to help them really look at this differently and say, wow, you know, do I deserve this? A pay increase in the bonus structure versus a base increase. So that's something that we're going to be digging deeper into on a future episode, but something to think about now. Second thing to start working on now is have each team member define their role. So don't just go over the job description and have it be something that's verbal. Ask them to write it down, ask them to tie it to a key performance indicator, align expectations together, have them sign off on it, and then hand it over to your team leader to actually be managing accountabilities. As such, the third thing that you can be doing, put weekly tracking into place. Weekly tracking. We would recommend the team leader is reporting to the doctor weekly on specific key performance indicators in the practice that are assigned by role. Breaking this down even further further, you can have daily morning huddles where each team member is actually reporting on their own accountabilities per day. These are specifically around production so that you're in the know daily on what's happening as well. The visibility is going to be creating a lot of accountability. So let's recap today's big ideas. Number one, payroll isn't an expense, it's an investment. Start treating it like it's one. Two, every role should have goals, metrics and clear accountability and someone managing that as well. Three, when your team knows how to win, they stop waiting and they start leading. If you want to start measuring your team's return on investment without stress is our book, Million Dollar Dentistry. And if this episode gave you a new way to think about salary as an expense or an investment. Share it with a friend, your office manager, or your whole crew. I'm Kelly Dahmer, and this is the Next Level Practice Podcast. See you next time.